The Japanese Food Market

Presentation prepared for the European Institute for Asian Studies, Swedish

Embassy, TokyoJune 20, 2011

Stephanie Assmann, Akita University

Demographic Changes

Aging of society

Delay of marriage and parenthood

Single parent families remain a rarity

Fertility rate at 1.26.

Conventional patterns of family life

Women

41 percent of the workforce

70 percent leave workforce upon marriage and/or childbirth

Fragmentation of Food Retail Market

Convenience stores, specialty stores and drug stores cater to single consumers

Pre-packaged foods, ready-made meals, snacks and frozen foods

Family-owned shops cater to families who purchase fresh food on a daily basis.

Older consumers

New shopping possibilities such as home delivery services

Use of modern communication technologies

Eating Habits Culinary influences from China, Korea,

Spain, Portugal, France and Italy.

Famous non-Japanese foods

1. Tempura from Portugal

2. Ramen from China.

Occupation Period (1945-1952)

US food aid program supplied bread and milk for school lunches

American style fast food chains such as McDonalds in 1971 and Japanese interpretations like Mos Burger in 1972

Convenience Stores (Konbini)

Self-service mini supermarkets

Established in the 1960s

Sales area between 30 m²and 250 m²

Opening hours mostly 24/7

Ready-made meals, snacks, soft drinks , alcohol, cigarettes, postal and bank services

42,738 outlets (2004)

Yearly sales of 692.22 billion yen

Locality and convenience

Supermarkets

Established in the 1960s and 1970s.

Large-scale retail outlets

18,485 stores.

Sales of 1.08 trillion Yen (August 2009)

Key Market players

1. Seven & I Holdings

Sales of 5,649.9 billion Yen (US$ 60.8 billion)

Ito-Yokado

2. Aeon Co. Ltd.

Sales 5,230.8 billion Yen (US$56.3 billion)

Jusco

Supermarket chains Aeon and Saty

Convenience stores (Ministop )

Drug stores

Department Stores

Large-scale retail outlets between 1,500 m² and 6,000 m²

Almost a third of department store sales consist of food markets and gastronomy

Number of department stores has declined since the early 1990s from 455 department stores to 308 outlets in 2004

Sales figures of department stores have declined from 8.99 trillion Yen (99.12 billion US Dollar) in 1999 to 7.38 trillion Yen (81.45 billion US Dollar) in 2008

Standard Assortment

Freshly made delicatessen and bentō (lunch box), food gift boxes , coffee and tea specialties

Rich in history and tradition

Socializing and cultural events

Mitsukoshi

Founded in 1673

13 department stores in Japan and 22 department stores in Paris, London, Taiwan and Shanghai

Mitsukoshi Isetan Holdings key market player

Sales of 1.426 billion yen

Innovative distribution channels, such as online shopping, home delivery and mail order services

Food Safety Use of expired and/or tainted ingredients, illegal or

contaminated additives and pesticides

Mislabeling of food ingredients

Falsification of production dates and expiry dates.

Snow Brand Milk Products: tainted milk products

Meat Hope: mislabeling of croquettes

Fujiya: use of expired ingredients and mislabeling consume by dates of its products

Food scandal over tainted dumplings imported to Japan from China

Impact of 3/11 Disaster on Food Market

1. New focus on food safety

Fukushima Daiichi refocused the attention of consumers on food safety with implications for farmers

MAFF: prohibition of harvesting of Fukushima vegetables, such as spinach, kakina and parsley

Iitate-mura: emergency slaughtering of cattle

2. Earthquake and tsunami have destroyed coastal fishing towns in the Tohoku Region

3. The disaster has destroyed agricultural areas, in particular in the most affected prefectures Miyagi, Fukushima and Iwate.

Future Tasks

1. Identify new distribution channels and food products that are attractive for older consumers

2. Support and rebuild agriculture and fishing industry in the affected regions

3. Analyze if and how regional food products can be (re-)integrated into the assortment of food retailers.